New Direct tax Code will be Applicable from April 1, 2012 instead of April 1, 2011 , Download DTC Bill 2010

Direct Tax Code (DTC) Bill introduced in Lok Sabha on Monday, August 30,2010 by Finance Minister Mr. Pranab Mukherjee, Will now be applicable from April 1, 2012 instead of earlier proposed date April 1,2011. This bill comparatively offers lower benefits as compared to the original bill.

Download DTC Bill 2010

Highlights of DTC are as under:

• Proposed Individual Slab:

Upto 2 lac -Exempt

2 lac to 5 lac -10 per cent

5 lac to 10 lac -20 per cent

More than 10 lac -30 per cent

• The exemption limit for senior citizen and women is proposed to be raised to 2.5 lac.
• MAT is also proposed to be increased from 18 per cent to 20 per cent of the book profits of the company.
• Exemption limit of 1.5 lac on interest on Housing loan will continue.
• Tax on Foreign & Domestic company will be 30 per cent.
• Surcharge & cess on companies will be removed.
• It seeks to levy dividend distribution tax at 15 per cent.
• Income on non-profit organisations, exceeding Rs 100,000, is proposed to be taxed at 15 per cent.
• HRA exemption restored.
• Employer’s contributions to NPS (not exceeding 10% of salary), to approved superannuation fund (no limit – limit of 1,00,000 done away with), to approved PF (not exceeding 12% of salary), interest credited to approved fund not to be included in salary.
• Only actual rent from house property to be taxed. Present system of taxing notional value called ‘annual value’ proposed to be done away with.
• Rent received in arrears to be included in the year of receipt, whether person in owner of property or not, after allowing 20% deduction towards repairs & maintenance.
• Consideration received from transfer of carbon credits to be taxed as business income.
• Remission or cessation of any liability by way of loan/deposit/advance/credit to be taxed as business income.
• Scientific Research and Development in house facility expenses – weighted deduction proposed to be increased from 150% to 200%.
• Transfer of land of a sick industrial company made under a scheme sanctioned under section 18 of SICA where such company is being managed by worker’s co-operative not to attract capital gains tax.
• Reverse mortgage under notified scheme to continue to be exempt from capital gains tax.
• Exemption for long-term capital gains from equity shares/units of equity oriented mutual funds retained. STT to be retained.
• Short-term capital gains (where equity shares/units are held for 1 year or less) – deduction of 50% to be are allowed and balance 50% taxed. Likewise short-term capital loss to be scaled down by 50%.
• Deduction for interest on housing loan/loan taken for repair or renovation of house property upto limit of Rs. 1,50,000 in respect of one house pro-perty not let out. No deduction for re-payment of principal under the Code.
• Limit for tax audits for professionals increased from Rs. 15 lakhs to Rs. 25 lakhs. Limit for tax audit for business increased from Rs. 60 lakhs to Rs. 1 crore.
• TDS of 10% on payments in respect of life policies which are not exempt from tax from code.
• Amount received by employee from NPS trust is tax-free. Thus, NPS which is taxed on EET basis is proposed to be made EEE (Exempt-Exempt-Exempt) for employees.
• MAT rate – Increased from 15% of book profits to 20%. MAT Credit carry forward period increased from 10 years to 15 years.
• DDT on dividend of domestic company – 15%.
• DDT on income distributed by mutual fund/life insurance to unitholder/policy holder – 5%
• Wealth tax – threshold increased from Rs. 30,00,000 to Rs. 1 crore. Tax rate will be 1% of net wealth in excess of Rs. 1 crore.

When enacted, DTC will replace archaic Income Tax Act.

Direct Taxes Code: Tax Tables

I. TAX PAYABLE AT VARIOUS LEVELS OF INCOME BY INDIVIDUALS (OTHER THAN WOMEN AND SENIOR CITIZENS) AND HUFs

II. TAX PAYABLE AT VARIOUS LEVELS OF INCOME BY WOMEN RESIDENT IN INDIA AND NOT ATTAINED THE AGE OF 65 YEARS DURING THE FINANCIAL YEAR

III. TAX PAYABLE AT VARIOUS LEVELS OF INCOME BY SENIOR CITIZENS (I.E. INDIVIDUALS RESIDENT IN INDIA AND ATTAINED THE AGE OF 65 YEARS OR MORE ANYTIME DURING THE FINANCIAL YEAR)